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Do you realize how much people pay for PPC and its possible negatives?

Discussion in 'Website Development and Design Discussion' started by David G, Aug 22, 2002.

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  1. David G

    David G Internet Entrepreneur DNFcollege.com Exclusive Member

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    Someone recently posted how crazy it is and wondering why people pay so much for just one click and commented how some firms must have too much money to spend.

    It is truly amazing how firms pay Overture and Google so much for a simple click. Especially since the percentage of clicks which become orders is incredibly low, a very low percentage.

    I have a number of domains/websites where the exact same words/phrase as my domain name has PPC rates from $5 to as much as $25 per click. Isn't it unbelievable a firm would pay up to $25 for a click with such a small chance the click will become a client with an order?

    What makes this so odd is the fact these same places paying these insane PPC fees will not advertise on my websites for love or money or for almost no cost comparatively speaking. This is especially odd since some of my traffic comes from highly targeted type-ins of the exact term they pay tons of money for paying per click at Overture/Google.

    I have approached some firms and offered them a page 1 text or banner link for low fees such as $75 for an entire month and they almost always say no. Yet the same company does not hesitate spending zillions on these dubious value PPC programs.

    Often I wonder if competitors click on these paid links to run up the bills. Many times I run across $10 to $25 PPC links. Do you realize someone could click say 10 times a day for a month and cost the PPC advertiser as much as $3,000 to $7,500 a month.

    A competitor or even a disgruntled present or former employee could easily do this, or simply someone who enjoys causing trouble or expenses to website operators he may not even be involved with in any way!

    I am not accusing anyone but even the operator of the PPC Program (especially small little known firms offering it) could click on the links, perhaps done via a script, though there is absolutely no indication that is being done by anyone, but is a possibility. Since order rates are so miniscule anyway there would be no good way for the client to judge if that happens.

    These online firms who are paying zillions for clicks will typically not spend money on prepaid advertising, even though the cost is very low and also fixed, and not subject to abuse. This is one of the great internet mysteries and has puzzled me for a long time.
  2. Guest

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    Any company that advertises with high ppc bids would surely be running some kind of roi analyses as this is the area where ppc se's excel from a marketing tool pov.

    In addition, the ppc se's run filtering algorithms to remove spurious clicking to prevent people overclicking on links in the manner you have described..
  3. NamePopper.com

    NamePopper.com Gold Member

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    I always just assumed they have a way to keep the same person from clicking it 10 times a day to burn people like you suggested. Since we all know that hits and unique hits are two different things, and are measured on our site stats, they better have a system like that set up for these ppc's or the whole thing is pointless.

    Regardless of that topic--I agree with you and I am still not convinced ppc's are very efficient ways of marketing either.
  4. mole

    mole DNF Addict Exclusive Member

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    Who audits these filtering procedures, Auther Anderson? :)
  5. DnPowerful

    DnPowerful Platinum Member

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    Good thread realnames...

    I suspect that as long as the spenders are getting the end sales, they will pony up, regardless of what's behind the veil.

    However, it's interesting that Overture and others don't post something explicit about the integrity of their numbers, if for no other reason than to convince those who quietly doubt them to come to the table and spend.

    This is why generic key-in domains become so valuable, because you cut out the middleman, and deal directly with your customer.
  6. mole

    mole DNF Addict Exclusive Member

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    Same thing for Google search listings. 90% of all traffic come from search engines, not necessarily PPC ones. Type-ins comprise the rest.
  7. Who-Wiz

    Who-Wiz Registered User

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    If the price is right, I cannot see why PPC in general is not just smart business. You are getting an interested party to your website ( as stated before, with filters for "noise" ), and it is left to your own marketing presentation to "close" after you have someone's attention.

    That said, though a "CLICK" is ostensibly a "LEAD", while $25 seems amazingly high, if the rate of conversion is high as well, maybe the company can afford it.

    For the discussion to make much sense, I don't think you can argue in vague terms. "Can you believe people are paying X amount for a click?" We would probably need to be talking specifics. Basically, what people/company are paying what rates selling what product via what PPC SE?

    Not all markets are created equal.

    \\ WIZ //
  8. mole

    mole DNF Addict Exclusive Member

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    The point, Wiz, is whether the PPC system is safe from abuse from competitors, disguntled employees, even Overture themselves.

    The answer is simply no. And to subject yourself to a $25 click risk on a web-site that is wide open to everyone - friendly and hostile, honest and exploitative, is ludicrious.

    $25 PPCs should be contained in a verified membership protect web-site, to say the very least.

    Now... that's an idea :)
  9. Who-Wiz

    Who-Wiz Registered User

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    Again, though, Mole, specifics would help. I personally don't like debates/discussions the exist purely on generalities without a shred of practical real-world examples to spring from. They can really go on forever with no real benefit to anyone.

    We can certainly all agree on the premise that paying someone $25 to click a link is a ridiculous notion on its surface. Yet people are doing it. Why? (Specifics then help the discussion move forward).

    If I were to complain that people spending money they don't have is a bad idea, everyone would certainly agree, yet we have a huge and thriving credit industry. Not all populated by ridiculous people.

    \\ WIZ //
  10. mole

    mole DNF Addict Exclusive Member

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    Well, feel free to start, wiz :) There are a lot of trusting people and businesses who use the web honestly believing that the system is ethical and above board and that no one will take the mickey out of them. Not everyone is as net-smart as some of the members here.
  11. Who-Wiz

    Who-Wiz Registered User

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    Very true on all levels. The biggest lie on the Internet today is that everyone needs to have a website up to benefit their brick and mortar business-- y'know, just for the sake of having it there and nothing else. Real opportunity is often traded with vacuous "you just need to have this >insert product here< to compete" salesmanship. I was reading Michael Hammer's "The Agenda" and particularly found his comments about consumers being force-fed "products" and not "solutions" interesting.

    "Is there adequate scam-protection for PPC clients" can be as important topic as "Can exhorbitant prices for PPC ever be justified?" I think the former is more of a provider-by-provider basis than the latter (which seems to deal with larger groups of examples, and actually includes the former question as part of its scope).

    If someone told me Brand-X PPC provider charged Brand-Y company ( makers of Product-Z:SRP $1,000 ) of product/service Categorey-C $25 for each click-thru to their website from Brand-X's Search Engine results, I would find that interesting. Often times with basic examples, the devil might be in the details of how its being done (and as Sys said, the ROI).

    REALNAMES, can you name a few of these PPC providers charging $25 or so? I'd like to look through any literature they had. If nothing else, food for thought. Some interesting points.

    Thanks.

    \\ WIZ //
  12. David G

    David G Internet Entrepreneur DNFcollege.com Exclusive Member

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    Did not have much time to research this. The other day I found many paying in the $25 area per click.

    I just found this one paying for the word TRADING a staggering $45 per click :D

    1. Trade Futures for Just $9 Per Round-Turn
    www.ancofutures.com (Advertiser's Max Bid: $45.03)

    The reason I mention this one is I have some websites with 'trading' type of names and content.

    Here is another one for the 2 word phrase 'commodity trading' I just stumbled across -

    1. Trade Commodity Futures at Lind-Waldock
    www.lind-waldock.com (Advertiser's Max Bid: $13.04)

    2. Trade Futures for Just $9 Per Round-Turn
    www.ancofutures.com (Advertiser's Max Bid: $7.00)

    If you want to do some research yourself on how much firms are paying please go to www.SuggestionTool.com and then click on the link to 'View Actual Bids' - from Overture's website. That link is located approx' 2 pages down from the top. Simply type in the words or terms you wish to research the PPC prices.
  13. Mik

    Mik Guest

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    Wiz overture is one of the biggest ppc providers and they do not limit the max amount you can pay out for the privilidge of being listed in the top.

    Try typing in "dedicated server" at overture.com as that term is always high priced due to the competitiveness of the market, I sure there are plenty of sportsclickers/competitors clicking that term every day. Plenty of other examples, a few months back some clown was paying $50 per click for "miele".

    It depends on your business model but among the top 5 there is always at least one who leases servers out for $99 a month, so figure that 5 clickers per day and there goes your income from one server for one month. It is insane but hey if they think it's working and they get sales from it then good for them.

    Last time I checked they do have some screening in place, something like only charging for oneIP per day, of course at a competitors company that may have a whole class c it doesn't really matter though does it? Cookie based screening is not much better as you can always delete the cookie.

    PPC search engines are a flawed concept, no idea what ROI those guys who pay $20+ get but i'm sure there must be more cost effective ways of doing it.

    Oh yeah forgot to add, they are now trying to reinvent themselves, aparently Pay-per-click is the same as pay-per-performance at overture. They're singlehandedly redefining Internet marketing terms now.
  14. Who-Wiz

    Who-Wiz Registered User

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    Well, here's something that I wonder, maybe a certain amount of "Pay-Per-Click" campaign is the value of just being "listed", and that once they hit a "cap" on cost, that particular listing doesn't show up anymore ( thereby haulting cost )?

    Just throwing that out there, even though it sounds a little odd. I know Google's AdWords lets you run a campaign with a cap, and they estimate the length of your run based on average impressions over a specific period of time.

    It would be interesting to interview one of these people and find out exactly what they're gaining from this. I feel there are elements to this we are obviously missing. It's obvious there needs to be some type of logic to this, unless (as mole implies) most of these advertisers paying large prices simply don't know any better. I find that hard to believe any successful businessman can have their ROI results so obfuscated by an third-party as to continually buy into a product/service that costs them lots of money that never converts into additional profit.

    \\ WIZ //
  15. Mik

    Mik Guest

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    Well there are plenty of forums that cover ppc stuff and I am looking into finding a thread on one of them that has more than "we took into consideration fraud clicks when we did our ROI" from a host. If you do a search for overture at webhostingtalk.com it'll give you plenty of chit chat and info on sports clicking etc.

    How's this for pay per click though? nothing under 25 for the whole Top5!
    http://overture.com/d/search/?type=home&tm=1&mkt=us&Keywords=mesothelioma

    Ok found a thread on it where the owner of Rackshack comments on why they don't mind the click costs, basically due to Yahoo listing included for top 3 it's cheaper than advertising on yahoo. His comments are o nthe second page
    http://www.webhostingtalk.com/showthread.php?threadid=60672

    Also to add fuel to the fire there's a site prompting people to sports click on spam terms to cost spammers money
    http://spambattle.com/
  16. Who-Wiz

    Who-Wiz Registered User

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    Good posts:

    headsurfer writes - "No matter what it costs in the end, it costs a LOT less then buying a side bar ad just from Yahoo. A small fraction. $36 bucks is outrageous but it does fluctuate. We have paid as little as $10. We mainly buy this so that we get exposure at Yahoo and AOL without having to buy directly from them."

    nousername writes - "Hmm.. with google we had set a $25 CPC. This means we were right up the top of the list. Now yes this meant paying a lot more for a click but it didnt mean we were paying $25 per click! That is the maximum. According to google it is all done according to time of the day and how busy they are."

    Interesting notes. Apparently paying for a static ad can be much more expensive than a pay-per-click listing. Got it. I wonder what Yahoo's banner CPMs are these days?

    Mik, good "abuse" link example.

    I still feel the earlier notes about competitors launching directed efforts to increase the marketing expenses of other companies seem like they could be affectively combated. The lengths SpamBattle wants people to go to in order to appear unconnected to them (or otherwise filterable) seems like it would need to be carried out routinely by an severely obsessive compulsive individual. The less obsessed would probably lose interest quickly, or not cover their tracks well.

    Were I Overture, I can't imagine not being able to think of ways of better insuring a majority of valid leads. You'd think they'd use unique clients and cookies on some level. After a while, while perfectly "doable", it becomes a real "job" trying to get your "screw" to really hit its target (as opposed to an "easy-going" passtime activity). For a competitor, time would be better spent improving their product, instead of clearing the battle field for their other competitors.

    Increasing someone's marketing costs artificially and lowering their ROI doesn't seem like a practical use of anyone's time to me still. Then again, I don't understand script kiddies much either, even when talking to them at length.

    \\ WIZ //
  17. David G

    David G Internet Entrepreneur DNFcollege.com Exclusive Member

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    This may be so but is far from reality. There are zillions of geeks out there sending out viruses. We all get them most every day. It takes time and effort making and mailing viruses. Yet they do it as they consider that form of destructive vandalism fun, mentally rewarding and challenging for the geeks that they are. They would rather waste time on that than making money and improving their product (if they even have one).

    It's amazing destuctive geeks have not electronically vanadalized the PPC advertisers yet. It would seem relatively easy for someone to write a Script which automatically scans Overture and Google looking for high priced PPC bids (say over $10) and automatically clicking on them a number of times each day. It could be done from IP cloaking, anonymous or various IP addresses and computers to avoid any red flags being raised. Not that they would spot them anyway.

    I see safesys and others have said there are safeguards against abuse involving cookies and IP addresses, etc. However, I doubt if they are in place or really work. Why would Overture only charge you for 1 click per day per IP when in fact the average buyer visits a website on average 6 times before they place an order?

    If someone uses the PPC link to visit more than once a day it would seem well justified to charge for each visit, even if it's obvious it's the same computer or IP. Plus, I have seen no evidence they limit the number of PPC's per IP anyay. I am fairly certain that is not being done. If it is, please show some proof.

    Potential cases of PPC vandalism could easily cause zillions of dollars in damage every day, far more damage than caused by email viruses.
  18. Guest

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    a big part of the search engines is convincing their customers that their systems are safe - the big ppc engines have strong proprietary systems in place that do aggressively discount clicks based on a number of factors (ask any affiliate who tracks this).

    i can only guess, but i would say they ban based on clicks being made too fast from same ip, click volume, proxy clicks, unusual click patterns, known to be bad ip ranges etc

    The advertisers roi is the real key metric - and the reason they continue to pay the prices being talked about is because the roi's are favorable. If they weren't - they wouldn't pay, nobody is forcing them and its a simple commercial decision to make.
  19. Who-Wiz

    Who-Wiz Registered User

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    Here's an interesting article from Search Engine Watch.

    Ask the Search Engine: Coping with Fraudulent Pay-Per-Click Traffic
    http://searchenginewatch.com/searchday/02/sd0418-ppc-fraud.html

    Excerpt:
    The suggestion of cookies definitely sounded off when I said it. In the back of my head I was thinking along the lines of passing a session id, but this sounds more on point.

    Regardless of any of this, it sounds like PPC clients really need to be on top of their conversions/ROI, traffic, and logging (turn that http_referrer log attribute ON!)

    \\ WIZ //
  20. Who-Wiz

    Who-Wiz Registered User

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    I had another thought.

    Ok. How about this? People who create (or "mutate") viruses need to see a "ROI" as well, right? When they release a virus, they eventually see the problems their creations have started for people. Did they make it onto HotWired.com? Or better yet, Wall Street? What status has Symantec given it in terms of its penetration and affect on the online public? How likely is it to be found "in the wild"? It's a maniacal power that yields pleasing results.

    Similarly, hacking into machines or "owning" a box is no doubt very gratifying ( for people like this ). They can upload their own FTP software and steal some bandwidth with WAREZ and brag about it while handing out accounts to pals. In fact, many hackers get caught because they just HAD to go shoot their mouths off.

    Now... with so many other measurable forms of vandalism at their disposal, I think its pretty boring (read: low numbers of interested parties) to develop an intricate spoofing system that routinely adds a handful of fraudulent "clicks" to the highest paying PPC advertisers. Unless you WORK for the company ( and barring MASSIVELY NEWS WORTHY success ), how do you know how your doing?

    Just my opinion, but it feels akin to breaking into a hotel room in the middle of the night, and putting a whoopie-cushion on the desk chair and leaving. All the way home, the person could laugh to themselves about what they did, but its a fairly complicated joke without a single punchline ( or confirmation of impact ).

    Hacker: "Did I get 'im?"
    The Wind: Maybe. Maybe not. Maybe they didn't even care.

    Who knows if the highest paying advertisers found out your IPs (or your pattern of IPs) and filtered you out? Maybe they didn't even notice, and the PPC fees seem pricey, but still return a profit for them. What cooler things could you be doing than this bogus stuff?

    Kind of like a game of baseball and no one is keeping score. Sure you can play all you like, but that's about it.

    \\ WIZ //
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